Process Thinking in Services


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Lean Services, Lean Marketing and, as a result, Lean Service Design have been a large part of my efforts. When you get involved in a marketing effort, many people and organizations that are making the request have a failed service problem. It is seldom about getting more leads it is more often than not, managing the Leads they have. In today’s world, sales and marketing are very much about the performance of existing services.

Debashis “Deb” Sarkar has been researching, experimenting and working on how to successfully implement the Lean principles to service companies. Deb is also credited to have pioneered the enterprise-wide deployment of lean to service businesses in Asia in early 2000s. Last year, I did a podcast, Process Thinking in Lean Services with Deb and never published a transcription. This is a belated transcription of the podcast.

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Process Thinking in Services

  1. 1. Business901 Podcast TranscriptionImplementing Lean Marketing SystemsProcess Thinking in Lean ServicesCopyright Business901Process Thinking in ServicesGuest was Debashis “Deb” SarkarSponsored byRelated Podcast:Process Thinking in Lean Services
  2. 2. Business901 Podcast TranscriptionImplementing Lean Marketing SystemsProcess Thinking in Lean ServicesCopyright Business901Debashis “Deb” Sarkar is one of world’s leading lights in thespace of service Lean. He has been researching, experimentingand working on how to successfully implement the Lean principlesto service companies. Deb is also creditedto have pioneered the enterprise-widedeployment of lean to service businessesin Asia in early 2000s.Deb has led a large number of Leanservice transformations, and his effortshave led to the pioneering contribution toservice lean comprising: A) The DEB-LOREX™ model, B) holistic approach forservice lean implementation and C)blueprint for 5S implementation in servicecompanies.His work is encapsulated in books such asLean for Service Organizations and Offices: A Holistic Approachfor Achieving Operational Excellence and Improvements and 5Sfor Service Organizations and Offices: A Lean Look atImprovements.Deb sits on the global advisory board of Process ExcellenceNetwork and has held leadership positions in companies such asUnilever, Coca Cola and ICICI Bank. He currently holds theposition of Senior Vice President – Organizational Excellence,Change and Finance Transformation at Standard Chartered BankScope International.
  3. 3. Business901 Podcast TranscriptionImplementing Lean Marketing SystemsProcess Thinking in Lean ServicesCopyright Business901Transcription of PodcastJoe Dager: I would like to welcome you Deb and start with abasic question. What makes Lean for services different than Leanfor manufacturing or is there?Debashish Sarkar: Thanks Joe for inviting me to your podcast. Ithink conceptually when you talk about Lean whether it’s Lean forservice or Lean for manufacturing. The principles are quite same,but when you apply them to the service context, it’s quitedifferent, and the reasons are very, very simple. The first thingwhen you talk about a service context, the processes are notvisible, it becomes difficult to visualize the process unlikemanufacturing organization where you could see the process infront of you. I think that is the first key differentiator.The second differentiator is that typically service processes aremanpower intensive. It becomes imperative to look at the peopledimension.The third difference is that practically in today’s world, serviceprocesses are highly technology intensive right. How would youbalance technology and Lean tools? This is very, very criticalwhile facilitating a Lean transformation.The fourth very important point is that in a service context theproduction and the consumption of what you produce happen atthe same time because here the customer is standing in front ofyou. You have to get it right the first time. There can’t be anyrework etc. And last but not least, many of the principles that onewould have used in service or in manufacturing organizationswould not apply to a service company. I’ll talk about it little later,things like process standardization.When you talk about a manufacturing company, it’s given that
  4. 4. Business901 Podcast TranscriptionImplementing Lean Marketing SystemsProcess Thinking in Lean ServicesCopyright Business901you need to have standard work for everything that you do. Butin a service context, I think it has to be treated differently. I thinkthese are the five things, which come to my mind when youasked me what is different between Lean in a service organizationvs. Lean in a manufacturing company.Dager: You wrote a book, “5S for Service Organizations andOffices.” Is that generally the best place to start when introducingLean in services?Sarkar: Oh, yes, absolutely Joe. I can tell you from myexperience when I started driving operational excellent in a largeglobal financial service organization sometime around early 2000.We made a lot of mistakes. We started with Six Sigma, westarted with other of those methodologies which were in voguethose days, in early 2000 and then we realized that we were notgetting traction. We were not getting engagement. That’s wherewe thought; let’s try something very, very basic. As you rightlymentioned, I think 5S is an excellent approach to create thefoundation for Lean deployment in a service organization.Dager: Most of my listeners will know what 5S is. But is itdifferent for services?Sarkar: The 5Ss are not different, but the way you deploy in aservice company is quite different because as I mentioned thefive reasons even when you do 5S, I think you know, you have tokeep the 5 principles which I’ve mentioned in response to yourfirst question. I think those are the things that you need to keepin mind while deploying 5S in a service company.Dager: Well, 5S is not something that’s exciting to talk about andif you start out with that how do you get people motivated to dohousecleaning?
  5. 5. Business901 Podcast TranscriptionImplementing Lean Marketing SystemsProcess Thinking in Lean ServicesCopyright Business901Sarkar: That’s an excellent question. First of all, I think even youknow, I thought it that way, and this is around 10 years back that5S is a housekeeping tool. I think one of the biggest mistakeswhich I think change leaders like me often make is that we brand5S as a housekeeping methodology or housekeeping tool. I thinkwhile it may work in a manufacturing company, service companyit doesn’t work especially in banking etc. where you haveemployees from Ivy leagues etc. When you tell them that youhave to be a part of a housekeeping initiative, they’ll neverclearly be involved in it. I think the way to start is don’t call ithousekeeping. Maybe you can call it workplace organization.Maybe you can call it workplace efficiency program. Name itsomething else and I think the way to start with it is that do apilot in a bank branch or in a retail branch or maybe a groceryshop and involve the people in it.When you do 5S, I think you should try and resolve one of thecritical pains that are being faced in that unit or the retail outlet.Use 5S principles to eliminate it. What I’ve seen when you’re ableto have people with you over a period of 3 to 5 days, they seethings changing. Even the doubting Thomas starts becoming aconvert. When you start 5S deployment, maybe first one or twodays, and I think they will be skeptics but by the end of the 5thday when they see the change happening, those doubtingThomases’s become a convert.Dager: Well the latest buzzword I think this year in most businessbooks I have read is about organizational clarity, and that’s theessence of 5S is organization clarity.Sarkar: Absolutely. I think when you talk about 5S, it’s aboutorganization clarity. It’s about alignment; it’s about making surepeople are aligned in the same direction. It’s about making sureeveryone does what they’re supposed to do. It’s about tellingpeople why they’re doing what they’re doing. I think you’re right.
  6. 6. Business901 Podcast TranscriptionImplementing Lean Marketing SystemsProcess Thinking in Lean ServicesCopyright Business901It’s about organizational clarity. I think that’s where changeleaders like me need to make sure that somehow 5S needs to beconnected to a key business objective of the organization.Dager: I think you make a great point there. It needs to be tiedto a business objective but am I off base thinking that customersdemand that 5S is already present in a company they’re workingwith. Customers demand a certain amount of standard work.That’s a big part of what your brand is?Sarkar: No, I think when a customer comes to your organizationor they do business with you, they don’t care whether you have5S or not. I think what matters to him is that whatever productor service that you’re delivering, it should be impeccable, he getsit at the right price, right cost, right time, right quality etc. What Imeant by aligning with a strategic business objective is trying tomake sure if you’re deploying 5S, can you make sure that you’reable to align and focus towards making sure one of thecustomer’s objectives get addressed.And to explain this point, I’ll just walk you through one of myearly day experiences. When we were trying to implement 5S in aretail branch, one of the pains which the customers were facingwas when they come to the branch the query resolution time ishigh. What it mean that when a customer walks into your branch,asks for something, asks for a brochure, asks for some data, itused to take a lot of time. Because of which there was waitingtime, and that impacted the overall experience. I think one of theobjectives that we tried to accomplish in one of those early pilotswas that can we reduce the customer response time? Verysimple, you organize the workplace, you make sure thatprocesses are in place and focus on one metric which is anydocument should be retrieved within 30 seconds, right.And if you’re able to get that, the outcome of that is suddenly the
  7. 7. Business901 Podcast TranscriptionImplementing Lean Marketing SystemsProcess Thinking in Lean ServicesCopyright Business901response time of customer improves. So I think when I’m talkingabout aligning with a key business objective is not having ametric on 5S but essentially focus on things like response time,which is relevant, and business leaders understand. If you’re ableto make a difference, I’m sure people would buy into what you’retalking about.Dager: Standard Work is a big part of Lean. But there seems tobe a lot of confusion about that in services. Can Standard Workstill be a part for the creative type and for services?Sarkar: I think that’s an excellent question. I think a mistakemany Lean practitioners make is that they believe that, in aservice organization, we can go ahead and invent standard workall across it. That’s not the reality. The approach to do it iswherever you have processes which are customer facing, youcannot have a standard work, right. On the other side, if yourprocesses are not visible to the customer, you can have standardwork.Let me give you an example. If you get into a hotel and if you goto the front office, it doesn’t make sense to have standard workfor the way you know the front office executive engages with acustomer because every customer is different, the queries aredifferent. Standard work would not be of use there. What youneed in this customer facing process is a guideline, not standardwork.You don’t need to tell the person to look into the customer’s eye,speak this way, and speak that way because every customer isdifferent. Right their moves are different. For customer facingprocesses, when you do Lean implementation, please keep inmind standard work should not be pushed. What we should lookfor are general guidelines. That’s one part but when you look atthe back end of it, for example, reservations or maybe the
  8. 8. Business901 Podcast TranscriptionImplementing Lean Marketing SystemsProcess Thinking in Lean ServicesCopyright Business901kitchen, of course standard work is important there, and youneed to have standard work.I think the broad guideline that one needs to follow that if youhave customer facing processes, you can’t have, you shouldn’thave standard work. But whenever the processes are notcustomer facing, you can go ahead and have standard work. Letme give you another example. Again this is from financialservices. For example if you’re talking about processes in theback office, there you would have standard work. But if you’retalking about relationship management wherein high net worthclients are involved. You can’t have standard work right becausecustomer is different, their requirements are different. So thereyou will not have a standard work, but you’ll have broadguidelines. How you should approach customer what are the do’sand don’ts.Dager: What drives an organization to want to implement Lean inservice? What is the business case that a Leader says we need todo this?Sarkar: The current context provides an excellent opportunity forLean implementation because many of the economies slowingdown including India, China. I think it provides an excellentbusiness case to adopt Lean practices for business improvement.Change agents like me need to demonstrate that when you talkabout Lean it’s just not about cost cutting, it’s just not aboutefficiency. It’s about revenue, it’s about new products, and it’sabout customer engagement, right.I think what is required today is holistic deployment of Lean.That’s where change leaders like me need to engage with theCEOs and others and tell them that this is part of Lean, this iswhat you can do. Of course, doing it may not be easy. Maybe youneed to do a proof of concept to explain what you’re evangelizing.
  9. 9. Business901 Podcast TranscriptionImplementing Lean Marketing SystemsProcess Thinking in Lean ServicesCopyright Business901But I think you know if you’re able to show benefits, I think thereis a clear business case to adopt Lean.Dager: In your book, “Lean for Service Organizations and Offices”you layout a 19 step process. Is it that simple or maybe with 19steps, is that difficult?Sarkar: Joe that’s an excellent question. I think 19 steps areessentially directional in nature. Of course, it’s not easy, but Ithink what service organizations clearly struggle is they don’thave a readymade approach to deploy Lean in their businesswhile you have a plethora of literature around how it has to bedone in manufacturing. What the 19 step does is that it tells youwhat are the broad steps which need to be taken whileembedding a Lean thinking in a company now. Of course, whatyou did realize, you may take 23 steps, or you may put it downto 15.I think what the 19 does that they are the most important of therelevant things that you need to do in a company. Of course incertain places, maybe you need to do a few things more and incertain companies maybe you need to do a few things less. Ithink 19 steps are very, very directional. Are they easy? Notreally, I think it’s arduous, and it takes a few years. So that’swhat it is Joe.Dager: Time is a key component in Lean thinking. How does itapply to services and where does it not fit?Sarkar: Excellent question. I think let me compliment you for thegreat question. First of all, as you know it, Lean is also calledtime based management, right. It’s often said the wholeendeavor should be to take time out of processes. I mean youshould go ahead and somehow reduce the time in a process. Butin a service organization the treatment has to be different. This
  10. 10. Business901 Podcast TranscriptionImplementing Lean Marketing SystemsProcess Thinking in Lean ServicesCopyright Business901concept has to be the concept of time based management, has tobe treated differently and the focus should not be on taking thetime out of the process, but the focus should be on optimizationof time.What do I mean by optimization of time? I think this entireconcept of time has to be used based on the context that you’rein. So let me give you an example. So there would be placeswherein you would like to take time out of processes. Forexample if you’re doing a mortgage processing. Your wholeendeavor would be to make sure that from the time theapplication is given till the time that the money gets credited intoa customer’s account should be as fast as possible. So there Ithink the endeavor is to take time out of the process.That’s one example. Let me give you another example, and that’swhere this entire concept of perceptual time, which comes intobeing. For example, if you’re in a retail bank branch and you’rewaiting in line. I think many times, what the customer reallyfeels, what he does during while waiting in a queue etc. So that’swhere you know, what you try and do, maybe you can addtelevision but essentially engages a customer.Another example could be if you’re waiting in a train stationduring day time. Two minutes could just fly off in a few seconds,in a jiffy, but if you’re standing there at 12 p.m. at night all alone,two minutes focus towards what appear as if it’s 5 hours. So Ithink in the second case you have to focus, the endeavor has tobe towards managing the time perception right as perceptualtype.I think that is the second element of time and third, there areplaces wherein you would like, your objective would not be totake time out of processes rather to increase the time that youspend with customer. For example, you get into a luxury mall;
  11. 11. Business901 Podcast TranscriptionImplementing Lean Marketing SystemsProcess Thinking in Lean ServicesCopyright Business901right you don’t want the customer to go out of the shop right. Thewhole objective would be that how do I make sure that thecustomer spends maximum amount of time in that outlet whereinhe just visited.So talking about time just to summarize I think when you talkabout time and services. There are three things first, there arecases, and the focus has to be on time optimization. There arecases wherein of course you have to take time out of processes.Second there are cases wherein you have to focus with, you haveto work around perceptual time. It’s essentially that time which isperceived by the customer. And the third one is the focus is notto take our time out of processes but essentially to make surethat you increase the time which the customer has with theorganization.Dager: I think they are excellent points, and one of the thingsthat we talk about is ownership as a key ingredient for success inservices but why is that, I mean, don’t we all know who isresponsible for what? Why is that get mixed up in services?Sarkar: I think there are a number of reasons why it happens.First of all I think, there are issues around people ownershipright. So on ownership again as I look at it when I’m talkingabout people ownership it has to have another three levels. Oneof course is the level of the leadership direct reports. If they don’town this Lean deployment and just delegated to somebody else.You can just imagine what going to happen.That’s the ownership at the top management level. The secondtype of ownership when you talk about people is around middlemanagement right. You may have a commitment from the top,but if you have a disengaged middle management, you can justimagine nothing is going to happen and there would be a falsestart in the organization, and the third type of ownership is
  12. 12. Business901 Podcast TranscriptionImplementing Lean Marketing SystemsProcess Thinking in Lean ServicesCopyright Business901essentially ownership at the frontlines or the grassroots level.If you don’t involve them in your Lean endeavor in the Leanimprovements that you’re doing, making them a part of. You willsee that there is no ownership. The first element that I spokeabout was ownership around people. The second type ofownership deficit that I’ve seen is around processes, and achallenge that one sees in service companies is that in manyglobal service organization, the service, the processes cut acrossgeographies on functional silos.It’s quite possible that a process may start in Connecticut, moveto England and from there, it may come to India. The processmay pass through a large number of functional silos, and eachone of them is owned by different people. It becomes very, verydifficult many times to have one process owner. The reasons arevery simple because you have these functional leaders who oftenown part of the processes. The second reason why it becomesdifficult is of regulatory constraint. In businesses like financialservices, there are functions which have to be treated separately.Even if, you want, you can’t have process ownership.Of course, today many organizations are finding solutions aroundit. That’s way instead of having one person own the end to endprocess what they do, they have a set of leaders, a set offunctional leaders owning an end-to-end process. I think that’swhere you have ownership deficit issues around processes. Whenyou talk about ownership issues, I think it’s about people andprocess.Dager: You have to pay a lot of attention to the handoffs withinthe system because that’s where I would think ownership and nothaving a clear structure that things can get dropped.Sarkar: Absolutely, I completely agree. Yes, I think managing the
  13. 13. Business901 Podcast TranscriptionImplementing Lean Marketing SystemsProcess Thinking in Lean ServicesCopyright Business901handoffs is very important. That’s where it often makes sense tohave service level agreements. That’s where you need to haveregular offline meetings. That’s where you need to havedashboards. That’s where you need to make sure everybody inthe process across functions has common objectives. This is theentire concept of local optimum vs. system optimum. I think ifyou are able to take care of this, hopefully, the handoff issuesand other issues around ownership are taken care of.Dager: Can you explain what the DEB-LOREX index is?Sarkar: DEB-LOREX index is actually something which is derivedfrom the DEB-LOREX model. What is a DEB-LOREX model? DEB-LOREX model is essentially a holistic model that provides aroadmap, implementing Lean in a service company. Why do youneed a DEB-LOREX model? You have a great system, a greatmanagement system and turned up production system. Oftenpeople in service companies find it very difficult to relate withproduction system. Especially, if you are not a Lean practitioner.So you actually need a model which they can understand, andthat’s where one came up with a DEB-LOREX model. I think DEB-LOREX model, which is formed, by the confluence of thephilosophies of Lean and System Thinking. That’s one criticalelement and the broad components that make up the DEB-LOREXmodel are leadership functions, value streams, anchors, Leanthinking and results. If you’re essentially talking about creating aholistic Lean service organization and if you’re able to follow aDEB-LOREX model, you can take your organization to the nextorbit and to track progress as you move up the improvementsspiral, you have something called the DEB-LOREX index.Lots of attributes on the leadership, there are attributes aroundfunctions, there are attributes around value streams. There areattributes around anchors as I called them. There are attributes
  14. 14. Business901 Podcast TranscriptionImplementing Lean Marketing SystemsProcess Thinking in Lean ServicesCopyright Business901around Lean thinking which you need to measure on an ongoingbasis. It will essentially provide directional guidance on whereyou’re on your Lean journey.Dager: When you use the DEB-LOREX model, you’re sitting therelooking how your Lean transformation is progressing. You’reactually seeing it. Is this just only for services?Sarkar: No, while it’s made for services, I mean one can use it formanufacturing also. But typically manufacturing professionals,they can be resistant to use it because one it does not use any ofthose Lean terminologies which you would find in a Leanproduction system. Conceptually you can even use it for in amanufacturing company because it’s generic in nature. All thatyou need to do, you need to customize it according to the contextin which you have your business.Dager: What are some of the pitfalls that the DEB-LOREX modeladdresses? What jumps out to me that if I would use it thatwould prevent me from doing or the added knowledge it wouldgive me?Sarkar: I think the first what it does it provides you a holisticapproach to Lean transformation. I think that’s the key. Youknow, typically what happens when people embark on Leantransformation Joe, you know it so well. They’ll improve one ortwo processes do a few Kaizen Events, and they’ll think they’vegot it right. I think what it really does it provides a holisticapproach, so that’s point number one.Point number two it essentially looks at the deployment as amanagement system and believes that if you have to get it right,you have to look in all the elements; your leadership, your valuestreams, anchors. You have to make sure everything is right, andthere is actually a cause and effect relationship. If you don’t get
  15. 15. Business901 Podcast TranscriptionImplementing Lean Marketing SystemsProcess Thinking in Lean ServicesCopyright Business901leadership right, you’ll not get results. Even if, you have greatvalue streams if you have people wherein you are keen whichbelieves in Lean, so what it does, it establishes a cause and effectrelationship between what you need to do to get the desiredresults.The third, it actually tells you that which are the levers that youneed to press while embarking on a Lean journey and it wouldalso tell you that what not to do because you’ll realize that thereare things that if you do it can actually impede your Lean. I thinkin a nutshell, probably the biggest advantage is that it provides aholistic approach to improving organization using the Leanprinciples.Dager: Do you use it?Sarkar: I guess, I did use it and I’ve found it very useful. When Iwas working in one of my earlier employs wherein I spent adecade. The entire organization was using DEB-LOREX model. Ofcourse then around 2010, the CEO moved out and there wassome change and of course then I also moved out. I don’t knowwhat the state as of now is.Dager: Well, you have a new book coming out. Could you tell meabout it?Sarkar: This book called, “Lessons in Lean Management: 53 Ideasfor Services” which is going to be in the market in September2012. It is essentially scrolling of what are the things that youneed to keep in mind while deploying Lean in a service company.I think that’s one of the key facets. Second, what it does, it’s justnot meant for Lean practitioners, but it’s also meant for peoplewho are uninitiated to Lean. Third, you know, the book alsoprovides some of the first of its kind of tools which have neverbeen published and which are very, very relevant to service
  16. 16. Business901 Podcast TranscriptionImplementing Lean Marketing SystemsProcess Thinking in Lean ServicesCopyright Business901organizations.Dager: Is there something that you would like to mention aboutLean for services that maybe I didn’t ask?Sarkar: No, I think one of the things very critical that I think weneed to remember is that the biggest mistake that many of us dois to treat Lean as a methodology. To treat Lean as another of thetools, another of the tools from which we’re deploying in anorganization. I think what is critical to remember that Lean is achange management program. Lean is a people’s endeavor; Leanis about engaging leaders, Lean is about making sure, all theelements of the organization and the business are taken care of.When you treat Lean as a change program, you will see thebenefit and sometimes, we get caught between whether tools,and we’ll be hung upon calling Lean as Lean. I think what’simportant, call it what is relevant in the organization. Right, forexample, in one of my earlier employs, we called it symphony,right. I know another company wherein they call it fast forward.So do what is relevant, do what your management likes to call it.Treat it as a change management program and of course, sorrylet me just correct it. Don’t treat it as a program, treat it as ajourney. The moment you talk about a program, it’s got an end.Treat it as a journey, not as a program, name it, what is relevantto the organization but keep in mind that you have these toolsfrom Lean or Six Sigma and use them based on the context andthen improve your company.Dager: What is the best way for someone to contact you?Sarkar: I think they can call me on the telephone, they can sendme an email and I’m readily available for anybody. I look forwardto speaking, learning, getting in touch with people, sharing whatI’ve done, and learning from others. I’m a student of Lean,
  17. 17. Business901 Podcast TranscriptionImplementing Lean Marketing SystemsProcess Thinking in Lean ServicesCopyright Business901student of improvement, I look forward to contacting, talking topeople.Dager: I would like to thank you very much. This podcast wouldbe available on Business901 iTunes store and also theBusiness901 blog site. Thanks again Deb.Sarkar: Thank you Joe. Absolutely, thank you so much.Joseph T. DagerBusiness901Phone: 260-918-0438Skype: Biz901Fax: 260-818-2022Email: jtdager@business901.comWebsite: http://www.business901.comTwitter: @business901Joe Dager is president of Business901, a firm specializing inbringing the continuous improvement process to the sales andmarketing arena. He takes his process thinking of over thirtyyears in marketing within a wide variety of industries and appliesit through Lean Marketing and Lean Service Design.Visit the Lean Marketing Lab: Being part of this community willallow you to interact with like-minded individuals andorganizations, purchase related tools, use some free ones andreceive feedback from your peers.